PETALING JAYA: IOI Properties Group Bhd
’s (IOIProp) weak financial performance for its first quarter of its financial year 2025 (1Q25) has left analysts with mixed views about the property group.
IOIProp posted core net profit of RM74.7mil for 1Q25 ended Sept 30, 2024, which was below expectations at around 9.5% of Hong Leong Investment Bank Research (HLIB Research) and consensus forecasts.
The results shortfall was due to weaker-than-expected property sales and lower-than-expected contribution from joint ventures (JV) and associates.
The research house, however, retained its “buy” call on the counter on the basis the company is expected to deliver improved performance in the coming quarters.
“Looking ahead, sequential improvements are expected, supported by higher occupancy at IOI Central Boulevard (IOICB) and reduced interest costs as rates decline, increased JV contributions from improved South Beach office occupancy, recognition of the Melaka land sale in 3Q25 for an estimated RM70mil net gain and initial contributions from Marina View Residences,” the research house said.
HLIB Research has a target price of RM4.05 a share for the counter based on a 35% discount to its estimated revised net asset value (RNAV) of RM6.24 a share.
It added IOIProp’s business prospects in Malaysia, Singapore and China are currently seeing a rejuvenation and the group will see significant value from its assets in Singapore, IOICB and Marina View Residences, which should anchor strong earnings ahead for 2025 and beyond.
Kenanga Research, meanwhile, maintained its “underperform” call on IOIProp and cut its FY25 and FY26 earnings forecasts by 11% and 6%, respectively, to account for a softer performance from the group’s property-development arm, due to sluggish operating margins and despite an expected better performance from its investment and hospitality units.
The research house cut its target price for IOIProp to RM1.67 a share from RM1.71, implying a 65% discount to IOIProp’s RNAV.
